Description

Dollar & Other General Merchandise Stores

Companies in this industry sell a variety of merchandise, including consumables and housewares, through physical retail locations. Major companies include Dollar General and Dollar Tree (both based in the US), along with Dollarama (Canada) and Poundland Group (UK).

The dollar and other general merchandise stores industry in the US includes about 36,000 retail outlets with combined annual revenue of about $68 billion. The industry includes single-price merchandisers as well as general merchandise stores. Department stores, discount department stores, and warehouse clubs and superstores are covered in separate industry profiles.

COMPETITIVE LANDSCAPE

Demand is driven by consumer spending, particularly among less affluent consumers, as most companies target the lower- to middle-income demographic. The profitability of individual companies depends on their ability to effectively locate stores and to maximize their revenue per square foot. Large companies have advantages in purchasing and in negotiating lease arrangements. Small companies can compete effectively by locating in a previously untapped market. The US industry is highly concentrated: the four largest companies account for about two-thirds of sales. Dollar Tree's 2015 purchase of Family Dollar Stores resulted in further consolidation of the industry. Together, Dollar General, Dollar Tree and Family Dollar operate about 25,000 individual stores with more than $36 billion in annual sales, according to eMarketer.

Dollar stores compete not only within the industry, but also with mass merchandisers, grocery stores, and drug stores. (Mass merchants Wal-Mart and Target have launched smaller-format stores in urban...